Maintenance at primary and secondary lead smelters increased, and supply-side reduction expectations are expected to boost lead prices to hold up well [SMM Lead Morning Meeting Summary]

Futures:

Overnight, LME lead opened at $2,003.5/mt, briefly touched a high of $2,007/mt before plunging. During the European session, it dipped to $1,984.5/mt, then recovered some losses by the close to end at $1,998.5/mt, down 0.42%.

Overnight, the most-traded SHFE lead 2510 contract opened lower with a gap at 16,810 yuan/mt, touched a low of 16,800 yuan/mt before rebounding. Bears reduced positions, pushing SHFE lead to fluctuate upward and close at a high of 16,895 yuan/mt, up 0.12%.

On the macro front:

On Tuesday, the US dollar index posted its first gain in six sessions as rising long-term yields pressured non-US currencies like the pound and yen. Trump announced an emergency meeting on tariff rulings would be held Wednesday, with an appeal to the Supreme Court potentially filed the same day. If the tariff appeal is rejected, tariffs would have to be withdrawn. An unfavorable ruling could require refunding trillions of dollars, with Trump urging the Supreme Court to expedite its decision, stating stock declines reflect the need for tariff policies. The PBOC disclosed August liquidity operations via various tools, conducting no open market treasury transactions. CPCA: August passenger NEV wholesale sales reached 1.3 million units, up 24% YoY. Two ministries issued a notice on tax policies for transferring state-owned equity and cash proceeds to bolster the social security fund.

:

SHFE lead continued fluctuating, with suppliers mostly offering at discounts. However, downstream demand remained limited amid extensive price negotiations, keeping spot order transactions sluggish. Primary lead smelters' offers varied regionally—northern China saw firmer ex-works prices due to transport constraints, while southern markets widened discounts. Mainstream origins quoted at premiums of -50~+30 yuan/mt against the SMM #1 lead average price. Secondary lead supply tightened regionally, with some producers halting sales and others following market trends, widening regional price spreads. Secondary refined lead was quoted at premiums of -100~+75 yuan/mt against the SMM #1 lead average price.

Inventories: On September 2, LME lead stocks fell 1,525 mt to 258,025 mt. As of September 1, SMM's five-region social inventory of lead ingots totaled 67,100 mt, down ~100 mt from August 28.

Today's lead price forecast:

Entering September, increased maintenance at primary and secondary lead smelters, coupled with unresolved raw material supply tensions and further declines in lead concentrate TCs, may support prices to hold up well on anticipated supply reductions. However, it is worth noting that after the conclusion of this week's Shanghai Cooperation Organization Summit in Tianjin and the military parade in Beijing, attention will shift to the lifting of logistics and transportation restrictions in North China. At that time, spot market circulation supply will increase. Considering the current lackluster performance of lead consumption, there is a possibility of short-term downward pressure on lead prices.

Data Source Statement: Except for publicly available information, other data are derived from public information, market exchanges, and processed by SMM based on its internal database model, for reference only and not constituting decision-making advice.